Homeowners Choice Property & Casualty Insurance Company, Inc., a subsidiary of HCI Group, Inc., has entered into a definitive policy replacement agreement with Anchor Property & Casualty Insurance Company.
It was announced in mid-January that Homeowners Choice was to acquire the insurance policies of Florida-based Anchor for an undisclosed purchase price.
Now, after purchasing the policies, Homeowners Choice has entered into an agreement with the company under which Anchor is to cancel all of its policies as of April 1st, 2020. Homeowners Choice will then offer short-term replacement policies under substantially the same terms and rates as the cancelled policies, which expire on the same dates as the cancelled policies were scheduled to expire.
An announcement on the agreement states that Anchor’s policyholders are in no way obliged to accept the replacement policies offered by Homeowners Choice. Furthermore, Anchor retains liability for policyholder claims arising from events occurring on or before March 31st, 2020. Once these policies in question expire, Homeowners Choice will offer renewals to the policyholders at its own rates and terms.
It’s been announced that the latest agreement between the pair does not contain a purchase price for the transition of business. However, in order to encourage a smooth transition, the agreement does include a payment based on the premium in force associated with the replacement policies remaining in force at June 1st, 2020.
According to an announcement on the arrangement and based on data provided by Anchor, Homeowners Choice estimates that at April 1st, 2020, Anchor will have a maximum of 43,000 policies available for replacement, representing a maximum of USD 69 million in annualised premium.
The President of Homeowners Choice, Karin Coleman, commented: “We are pleased to participate in this process, which ensures Anchor’s policyholders experience a seamless transition from Anchor to Homeowners Choice and continue to receive quality coverage for their homes.”